New-crop December corn futures have seen a rocket-shot rally
during the past three weeks. Prices have rallied by over $1.75 a
bushel from the May 29 low of $5.99 3/4 to the contract and
all-time high of $7.91 1/2 scored on Monday.
While there are no strong technical clues to suggest a market
top is close at hand, there are technical indicators that do
suggest the very steep price ascent the past three weeks has put
the corn market well into overbought condition, on a short-term
basis.
The 14-period Relative Strength Index overlaid on the daily
bar chart for December corn showed a reading of 84.03 before the
open Thursday. Any RSI reading above 70.00 does suggest a market
is overdone on the upside and due for a downside correction. The
present RSI reading in December corn is also the highest since
January’s RSI reading of around 90.00. When the RSI did reach the
90.00 area in January, December corn futures did see a downside
correction of around 55 cents a bushel.
Technical resistance for December corn lies at Wednesday’s
high of $7.85 and then at the contract high of $7.91. Technical
support is seen at Thursday’s low of $7.60 and then at $7.55.
By the way, I do have a free educational e-book that discusses
several of my trading tools. I’d be happy to email it to you. Just
send me an email at jim@jimwyckoff.com and I’ll email the
e-book back to you.--Jim
--Stay tuned! Jim
